Texas For-Profit Colleges Fight New Borrower-Defense Rules
Katherine Knott
February 28, 2023
The Education Department’s latest version of the federal regulations that allow borrowers to apply for relief if their college or university misled them “threatens to irreparably harm the American education system,” a new lawsuit argues.
Career Colleges & Schools of Texas, an association representing career education institutions in the state, is asking a Texas federal judge to declare the borrower defense to repayment rule unlawful. The association argues in its 85-page complaint that the rule violates the law by depriving institutions of due process protections and that the administration failed to meaningfully consider all the comments it received.
The Biden administration has discharged $17.2 billion in student loans via borrower-defense claims and a class action lawsuit, according to the American Enterprise Institute’s student loan forgiveness tracker. The lawsuit was filed on the same day that the administration is defending its signature loan forgiveness program in the Supreme Court, and in the same court—the Northern District of Texas—that first declared that program unlawful.
